US rice mills want China to hurry up and seal the deal

WASHINGTON, Sept. 6, 2017 - China finally signed off on the sanitary and phytosanitary protocols to open its market to U.S. rice in July, but now America's farmers, millers and shippers are again waiting on the Chinese to finish the bureaucratic process that will allow exports to begin flowing.

It took more than a decade to get China to agree to the protocols that were officially signed on July 19, but now U.S. government and industry officials are optimistic it will be just a few more months until China begins importing its first shipments of U.S. rice.

But first a delegation of officials from China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) – the Chinese equivalent of USDA’s Animal and Plant Health Inspection Service (APHIS) - has to visit and confirm that U.S. rice mills, storage and port facilities conform to the protocols that were agreed upon.

A U.S. government official tells Agri-Pulse that the USDA has invited the Chinese delegation to make its trip later this month, but AQSIQ has not yet responded. If the Chinese do come in late September – and U.S. officials say they are optimistic that they will – that will pave the way for U.S. exports. Exactly how long the AQSIQ team stays and how many facilities they visit will be up to the Chinese.

“They’re not going to be able to visit every facility, obviously,” the U.S. government source said. “They will randomly select a number of facilities and they will go out to see that they are meeting the conditions that were agreed to.”

If the Chinese allow the USDA to choose which facilities will be inspected, the USDA is ready for that, another government official told Agri-Pulse.

“APHIS has identified processing and storage facilities for AQSIQ to inspect and verify compliance with the terms and conditions of the protocol,” the official said. “The U.S. rice industry is aware of this requirement and is prepared to support these inspections … AQSIQ will also provide to APHIS a list of designated ports of entry in China eligible to import U.S. rice.“ U.S. officials asked not to be identified as they have not been authorized to comment on the China-rice deal.

One of the main things the Chinese will be looking for is bugs. A major hurdle during the protocol negotiations were Chinese demands in 2015 that the U.S. prove that its rice supplies were not contaminated with the Trogoderma granarium. The voracious bug, better known as the Khapra beetle, can do major damage in grain warehouses.

As part of the protocols – which have been shared with the industry but not yet made public -- owners of mills and storage facilities have to set traps for the pests. China is demanding access to data gained from the traps. The USDA does not collect that data, a USDA official said, but APHIS does do audits to make sure the facilities are following the proper procedures.

Khapra beetle

The Khapra beetle, which looks like a small brown lady bug, historically has been a major problem in countries like China, but the pest has rarely been found in the U.S. and then usually in imported containers. China’s concern is understandable because the beetle is considered one of the world’s most damaging pests when it comes to grain. An infestation can easily destroy 70 percent of an entire grain bin and the pests are very hard to kill because of their resistance to most insecticides.

Related pests that the U.S. has to show the rice industry is free of include Pharaxonotha kirschi, Tribolium audax, Trogoderma anthrenoides, Trogoderma sternale and Trogoderma versicolor.

One Louisiana miller, who asked not to be named, said he is maintaining the traps and is fully prepared if the Chinese choose his facility to inspect.

There was some initial resistance from U.S. millers at maintaining the traps and keeping records that could be accessed by U.S. and Chinese government officials, but eventually, most agreed.

That was likely because the rice industry is heavily dependent on exports and China is the world’s largest rice importer. Officially, China imported about $1.6 billion worth of rice last year, according to USDA data. Unofficially, however, the country buys a lot more, say analysts and farm group representatives. Industry data show that China purchases about 2 million tons of rice annually, but analysts say the real amount is closer to 5 million tons, including a lot of unrecorded shipments from Vietnam and other countries.

This week’s guest on Open Mic is Rod Hebrink, President and CEO of Compeer Financial. The lack of certainty from a new farm bill and weak commodity prices due to lost export markets and robust supplies have left farmers and lenders with a grim outlook for 2019. In this interview, Hebrink discusses the challenge of the unknown and the need for legislators and the White House to take action on farm policy, trade and regulations to help rural America prepare for the year ahead.

The world of agriculture extends beyond what’s growing in your field or living in your barn, and here at Agri-Pulse, we understand that. We make it our duty to inform you of the most up-to-date agricultural and rural policy decisions being made in Washington D.C. and examine how they will affect you – the farmer, the lobbyist, the government employee, the educator, the consultant and the concerned citizen.